Confronting the root causes of forced labour: governance gaps

Although forced labour has long been formally banned, the laws designed to protect workers are spottily enforced and it is rare that government inspectors physically check to see whether or not businesses are selling goods made with forced labour. Indeed, in the United States, one recent study found that “an employer would have to operate for 1,000 years to have even a 1 percent chance of being audited by Department of Labor inspectors”.[i]

Where non-government monitoring systems also exist, they are generally ineffective when it comes to detecting and correcting forced labour. Most social auditing systems focus on first-tier suppliers’ core workforces, and thus neglect the portions of supply chains where vulnerable subcontractors work and the risks of forced labour are highest. Furthermore, such private systems are riddled with conflicts of interest. When abuses are uncovered, they tend to be reported only to retailers who then have discretion over whether or not to act on them.[ii],[iii],[iv],[v],[vi],[vii],[viii]

In this sense, businesses’ ‘freedom to exploit’ must be understood as running in parallel to workers’ lack of the freedom to say no. Klara Skrivankova of Anti-Slavery International captures this point well when she says that forced labour’s “underlying causes include a regulatory framework in which the use of forced labour makes ‘business sense’ even if illegal, because the risks of discovery and prosecution are low, [in light of] weak enforcement of labour standards”.[ix]

The governance gaps and enforcement issues surrounding labour standards in global supply chains have been studied extensively.[x],[xi],[xii],[xiii],[xiv] There is also a smaller body of emerging research that specifically considers gaps surrounding forced labour.[xv],[xvi],[xvii],[xviii],[xix] Synthesising across this work, we suggest that there are at least three key governance gaps that have been strategically created around and within supply chains that facilitate the business of forced labour. These are:

the consistent under-enforcement of national and sub-national labour regulations;

weak global governance and national legislative approaches to ensuring labour standards in global supply chains, such as transparency legislation;

a governmental preference for self-regulation and corporate social responsibility (CSR) initiatives, which are too often not fit for purpose such as poor quality auditing and social certification programmes.

The under-enforcement of labour standards has become a popular strategy for attracting and maintaining investment, or for preventing offshoring, in the era of globalisation. It is part of an ongoing redesign of the labour market and business regulation to maximise profitability.[xxvii] Consequently, illegal business practices like forced labour have become stable and now constitute viable parts of many organisations’ business models.

In addition, weaknesses in private supply chain monitoring systems render them ineffective tools for detecting and addressing forced labour. They are, along with weak enforcement of labour standards and poor global governance frameworks, a key governance gap fueling the business demand for forced labour.

Adequate regulation and enforcement of labour standards within global supply chains would go a long way to eliminating the business demand for forced labour within those chains. And, as the next and final chapter of this report notes, where labour law is effectively enforced, and where businesses face consequences and penalties if they are caught using forced labour, it becomes a lot less viable as a business model.

The key barriers to closing these governance gaps are not technical, but political. As Nicola Phillips and Fabiola Mieres note, they derive from “an unshaken ‘market fundamentalism’ and a reluctance significantly to challenge the private sector and powerful corporations”.[xxviii] It is time for that to change.

For a more in-depth explanation of how governance gaps fuel the demand for forced labour, visit the original version of this article here.

The full Confronting root causes: forced labour in global supply chains report is available online or for PDF download.